[BULK] RE: [WSBAPT] Community Property Question
Eric Nelsen
Eric at sayrelawoffices.com
Mon Feb 24 15:29:31 PST 2014
All right, so no one wants to bite on this further. On the family law
listserve, we're at the same impasse; some people think it's SP, others
CP. The principal point of disagreement is on whether Borghi applies (see
point 4, below). And I still see as unresolved: If the CP-while-married
presumption does not apply when each spouse contributes SP to purchase a
new single asset, then when does it ever meaningfully apply?
There also appears to be an underlying disagreement about the
"foundational myth-image of the marriage" for CP:
This is a little flippantly put, but: Perhaps the underlying conception of
why we have CP laws could be either "two young people working to have kids
and create wealth together" or "two people creating a life together."
In the first scenario, there is a disconnect when it's an older couple,
kids if any are already grown, and who retired each with their own
SP--there's no "reason" for them to create CP. But in the second scenario,
age and source of money doesn't matter--buying something together means
it's intended to be part of their life together, and so CP.
Either conception obviously could be taken too far...but I think my own
tendency is toward the second version, and so I am not bothered by a CP
presumption in a marriage where the couple is older and retired each with
their own SP. Which also explains why I come down more on the CP side of
the question at hand.
Thanks all--
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, February 21, 2014 3:56 PM
To: wsbapt at lists.wsbarppt.com
Subject: [BULK] RE: [WSBAPT] Community Property Question
Apologies to those who have had enough of this thread, but I have the bit
in my teeth.
The rules as I understand them are as follows:
1. Status of real property (as CP or SP) is determined as of date of its
acquisition. Scott v. Currie, 7 Wn.2d 301, 306. This is the
"characterization on acquisition" rule I meant. Here, the real property
was acquired during the marriage.
2. Property acquired by purchase during marriage is presumed to be CP.
Scott at 305-306, citing Seaton v. Smith, 186 Wn. 447, 58 P.2d 830. Here,
the property was acquired by purchase, during the marriage.
3. The presumption of CP above can be rebutted "by proof that the property
acquired during marriage was in fact so acquired by the separate funds of
one of the members of the community." Scott at 306 (emphasis added). But
here, the property was acquired using the SP of both spouses
simultaneously.
4. The name on title is not determinative to characterization as SP or CP.
Borghi, 167 Wn.2d 480. SP maintains its SP character unless there is an
act demonstrating intent to convert that property to CP. Borghi. But
Borghi's holding is not directly applicable, because there the land in
question was acquired as SP by the wife before marriage; the question
before the court was whether that specific parcel of land had been
converted from SP to CP, when the husband's name was added to title via a
fulfilment deed. Borghi makes clear that SP stays SP unless there is a
clear event indicating an intent to convert that asset to CP. But that's
not the situation here, with a new acquisition. Changing the name on an
existing asset does not trigger the CP presumption; acquiring a new asset
does.
So, I still don't see why the presumption of CP would not apply here. The
presumption is that it is CP, simply by virtue of acquiring the property
by purchase during the marriage. The presumption can be rebutted, but I
don't see any evidence of intent to not create CP.
The use of SP funds by the spouses is not rebuttal evidence; it shows only
that each spouse used their own SP to acquire the house. If the CP
presumption does not apply in this circumstance, when would it ever
meaningfully apply?
The title as "husband and wife" is not determinative, per Borghi, but
neither does it rebut the presumption that the acquisition is CP.
What am I missing? And have a good weekend, all--
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Karen E. Boxx
Sent: Friday, February 21, 2014 8:49 AM
To: <wsbapt at lists.wsbarppt.com>
Cc: wsbapt at lists.wsbarppt.com
Subject: Re: [BULK] RE: [WSBAPT] Community Property Question
I don't know what you mean by the "characterization on acquisition rule."
true that there is a cp presumption for property purchased during marriage
but it's just a presumption. character of property acquired is generally
determined by the character of the consideration paid, and the
consideration here would not be cp because not earned while living in a cp
state. you should take a look at the scott case I cited, or Professor
Cross' article. and as for quasi-community property, the statute is clear
that it's a characterization that only attaches on the death of one
spouse. it's not really a type of cp - it's a statutory substitute for
the elective share that the surviving spouse would have gotten if they
stayed in the state where the property was earned.
this is a good time to mention that the new edition of the wsba community
property deskbook is available, or will be very shortly!
karen
Sent from my iPad
On Feb 20, 2014, at 10:44 PM, "Judy Luther" <JELuther at comcast.net> wrote:
I am confused as well. Am I not understanding RCW 26.16.220? I
understand quasi-community property to be property that would have been
considered community had the married couple been residing in Washington
(or any CP state) at the time the asset was acquired. Therefore, if the
spouses earned income in a non-CP state, then moved to Washington and used
said income to purchase a home, the income would be considered quasi-CP
because it was earned during the marriage, and the home would be
considered (at a minimum) quasi-CP because quasi-CP funds were used to
purchase it. Am I completely off base?
~ Judy Luther
Judith E. Luther
Carlson-Whitley & Luther, LLP
1217 Cooper Point Road SW, Suite 6
Olympia, WA 98502-7206
Ph: (360) 915-9774
Fx: (360) 915-8759
From: Eric Nelsen <mailto:Eric at sayrelawoffices.com>
Sent: Thursday, February 20, 2014 10:13 PM
To: wsbapt at lists.wsbarppt.com
Subject: [BULK] RE: [WSBAPT] Community Property Question
I think I am missing something, if I'm coming up with an opinion contrary
to Prof. Boxx's.
Would the house be separate property solely because the money used to
jointly acquire it was each spouse's "separate property" based on another
state's law? Does the characterization-on-acquisition rule not apply for
some reason?
This isn't a situation where, for example, Wife buys a car with cash from
a separate-property bank account and titles it solely in her own name. I
understand the question to be about a house bought together (with both
spouse's separate funds) and titled jointly as "husband and wife." As an
acquisition during marriage, that seems like it's presumed to be community
property. At the very least, I would think the separate property
commingled and therefore now community property.
Also, as it's titled in "X and Y, husband and wife" which looks (to me)
more like holding as community property versus "X and Y, a married couple,
each as to an undivided equal separate property interest as tenants in
common." All these things together, to me, make the community property
presumption difficult to rebut. It is bolstered by the rule that separate
assets used to acquire an asset and including the other spouse's name on
title is presumptively a gift to the community. The case cited, Scott v.
Currie, 7 Wn.2d 301, cites all these rules.
If I'm messing this up, I would welcome comments and criticism. Thanks as
always--
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Karen E. Boxx
Sent: Thursday, February 20, 2014 5:39 PM
To: <wsbapt at lists.wsbarppt.com>
Subject: [BULK] Re: [WSBAPT] Community Property Question
it's still separate property if it was earned in a common law state. by
definition, if acquired in a common law state it's separate when they
acquire while living in a non cp state and bring it into washington, even
if it would have been cp if earned while living here. I read your fact
description that they had earned all their money while living in a non-cp
state.
Sent from my iPad
On Feb 20, 2014, at 5:35 PM, "Jacob Menashe" <jacob at hickmanmenashe.com>
wrote:
What an interesting discussion – thanks to all who contributed! Indeed, I
am thinking about a scenario where one spouse has died.
And I guess my question back to Professor Box, if I may, is whether her
analysis would be impacted in that it wasn’t really separate property that
went into the house purchase, by Washington residents, as “husband and
wife,” but it was money these folks had together from their marriage, and
from both of their work outside the house?
Jacob
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Karen E. Boxx
Sent: Thursday, February 20, 2014 4:09 PM
To: <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Community Property Question
Sam is right - quasi-community property only applies on the death of the
first spouse. as for the community presumption, it's easily rebutted by
the fact that the $$ used to purchase the home was separate, because
earned in a common law state. see Scott v. Currie, 7 wn.2d 301. they
could convert it to community property by agreement now that they live in
Washington, but the deed doesn't seem to get them there.
Sent from my iPad
On Feb 20, 2014, at 3:39 PM, "Sam Furgason" <sam at furgasons.com> wrote:
I believe somebody has to be dead before the quasi-community property
rules come into play (check out 26.16.220 et. seq.), so if they are both
still living there is not yet any quasi.
That gets you into presumptions (property held as husband and wife is
(rebuttably) presumed to be community, which gets into intent. They might
want to clear that up, because there is no mention of quasi in IRC Sec.
1014, which adjusts basis of both halves of community property on death of
one spouse. That is, of course, if they’re still speaking.
S
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Jacob Menashe
Sent: Thursday, February 20, 2014 2:54 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Community Property Question
I have a community property versus quasi-community property question.
Husband and wife move to Washington after retirement. They take funds
earned in a non-community property state and purchase a house as “John and
Sally, husband and wife.” Is the house community property or
quasi-community property?
Thanks,
Jacob
_______________________
Jacob H. Menashe
Hickman Menashe, PS
4211 Alderwood Mall Blvd., Suite 202
Lynnwood, WA 98036
(425) 744-5658 phone
(425) 744-6078 fax
www.hickmanmenashe.com
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